Warren East, the former CEO of Arm Holdings, has voiced strong criticisms about the UK's failure to retain and commercialize its top tech firms on a global scale. Speaking at Cambridge Tech Week, East highlighted the growing concerns over the country's lackluster economic performance, citing poor GDP growth and the ongoing trend of British tech companies moving their operations overseas or choosing to list abroad, particularly in the United States.

During his tenure at Arm, which he led from 1994 to 2013, East witnessed the tremendous potential of UK-based innovative technology. However, he lamented that this potential often goes unrealized within the country's borders. “We tend not to be able to realize as many global businesses as that promise would suggest,” East remarked, underscoring the challenges UK tech firms face in scaling up and achieving global relevance.

One of the key issues East pointed out is the UK's investor community. He noted that the risk appetite among British investors is significantly lower compared to their counterparts in the US, where capital markets are more supportive of high-growth tech firms. This difference in mindset is a crucial factor driving UK companies to seek opportunities abroad, where they can access deeper pools of capital and a more conducive environment for growth.

Arm Holdings itself is a prime example of this trend. Despite its critical role in the global tech industry, with chip architectures powering most of the world's smartphone processors, Arm chose to list on the Nasdaq in the US, a decision seen as a major blow to UK officials and the London Stock Exchange. The move highlighted the UK's struggle to hold on to its tech giants, even as the country continues to produce world-class innovation.

East also touched upon the need for policy changes to address these challenges. He mentioned ongoing discussions within the UK's entrepreneurial community and venture capitalists about revising capital market rules. These changes would ideally allow for more investments from pension funds into startups, thereby stimulating the much-needed risk appetite among UK investors.

“Businesses can’t guarantee that’s going to happen, and can’t wait for the rules to change,” East warned, stressing the urgency of the situation. He emphasized that while the UK has a lot to offer in terms of innovative technology, the country's inability to commercialize these innovations on a global scale is a “national embarrassment.” The consequences of this failure are not just economic but also impact the UK's global standing in the tech industry.

East, who is also a former CEO of Rolls-Royce and currently serves on the board of Tokamak Energy, doesn't claim to have a “silver bullet” solution for the problem. However, he advocates for a mindset shift among UK investors and policymakers to better support the country's tech firms as they scale up and compete on the global stage.

The broader implications of East's criticism are significant, especially in the context of the UK's ongoing economic challenges. With GDP growth stagnating and tech firms continuing to leave the country, there is a pressing need for the UK to rethink its approach to innovation and commercialization. The future of the UK's tech industry may well depend on the ability of its investors, policymakers, and entrepreneurs to rise to this challenge.

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Bold steps and a renewed focus on retaining and commercializing technology businesses within the UK are crucial if the country wants to maintain its position as a leader in global innovation. The future of the UK's tech industry, and indeed its economy, may well depend on it.